Largest PBMs By Covered Lives

The covered lives calculation is a little funny since a “life” can be counted by multiple PBMs. For example, look at the Federal Employee Plan (FEP) contract which until recently was split between Medco and CVS Caremark and therefore counted by both (I assume). But, it is a measure that is used none the less. [Another way is based on claims processed.]

It is interesting…isn’t it? If you add in the other “PBMs” from the AIS / PBMI list, you would have another 100M+ lives.

That’s why it’s a good metric for understanding relative size and/or breadth of services, but it doesn’t give you much insight into their true business size.

What I’d like to do is adjust PBM revenues based on excluding drug costs that simply flow through to the retailers and look at their size based on true revenues collected (admin fees), rebates kept, and mail order prescriptions (traditional and specialty). I think that would paint an interesting picture of true size and better reflect profitability than when the numbers are diluted with the huge cash flow to the retailers.